Document qdy21a61w4gYEojzYyRjnxLmE

PriAL AMD PRnriLZQXD ?'8 CPUMCTIiaTlOH----- PLAINTIFF'S EXHIBIT-^;,-, JM-1704. Johns-Manvillf. Corporatjov T*UITt TWO fcAWT rOWTirTM frTHt *T vcw ronit. v r. 1001a >m>dt Hoarrov Dau. February 4. 1669 J. M. Atkinson, Group Solicitor Turner b Bewail Ltd. Asbestos Bouse Fountain Street Manchester 2, England Dear Mr. Atkinson: 1 write In response to your letter of January 24, 1969. I aw sure that you can appreciate that our Interest In the labeling . of asbestos fiber Is primarily social and humane rather than legal. However, I shall set forth the salient legal considerations in our present thinking. At the outset, I should state that the decision to label or laprlnt the bags containing the fibers has to date only been Bade with respect to shipments to buyers situated In Canada or the 0. S. A. For the present, I an going to confine sysclf to the of U. 6. A. At the present tine we have pending against us In the courts of three different states three distinct coaaon law actions brought by enployees of purchasers of our industrial insulation products, each alleging the contracting of asbestosls through the Inhalation of asbestos fibers over a period of years. The i.oers in inese produces *re ~.o- n a free state but were combined with, and often contained in, other eleents. Thus, they were leas apt to get Into the ataosphere than "raw" fibers would be. The damages claimed In each of these cases are In the vicinity of $760,000. Further, there are pending two additional common law cases which Involve clalss of asbestosls by people who lived In the vicinity of one of our plants and who claim to have contracted the disease through air pollution. While the bulk of our fibers are mined In Canada, a substantial proba bility exists that the American courts would not only take jurisdiction of a claim brought by an American citizen for Injuries sustained by such a citizen In the D. S. A. as a result of working with, or other wise being exposed to, asbestos fiber In the G. S. A., but that the courts would apply "V. 8. A. law". Moreover, In determining the applicable law the American courts would probably resort to .the law of one of our SO states, depending upon which state's law the-courts deemed applicable under conflict of laws rules. The law that would be relevant may well vary somewhat from state to state and so we can only approach It for purposes of this discussion . > in > 1i n n t U jUj uu0 J -2- In tarns of generalities. Throughout the U.8.A. (on a state by state basis) the las in this area in presently undergoing a significant and rapid change and se stand today Ir the eldst of the development of nes legal ccnccpts. Traditionally, two llnjs of legal thoucht would be applicable to the questions of the liability of a "manufacturer" (using that term broadly) of asbestos fiber to various persons for damavee sustained hy the* through the ir.htlstlor of such, fibers. These are the law of tort and the law of contract. Until 1916 both of these approaches were generally limited by the re quirements of privity, which encompassed both horizontal and vertical relationships. The Initial concept horizontally was that only the purchaser (and not others, such as members of the purchaser's family, othor contemplated users or unforeseen bystanders) could sue. The vertical concept wcj that the purchaser could only sue the party with respect to which the purchaser stood In a relationship of immediate privity. In 1916 the Court of Appeals of ths State of New York eli minated the privity concept with respect to the vertical relationship In the landmark case of MacPherson vs. Bulcfc. 217 N.Y. 382. That Is. the Court determined that- purcEcsei of an automonlle could sue the manuiccturer thereof In tort for negligence even though the purchaser was not In privity with the manufacturer because he bought the auto mobile from a dealer. Tbls was tbe beginning. Subsequent decisions have generally eliminated the horizontal privity reauirements so that anyone, e-o- a bvstar.de- *>ot i --sir or r.r.e iroluct car row sue :s.e manufacturer for frjunres i.snrr.e: as a result of the manufacturer's negligence In the production of the product. Tbe concept of production here Includes the packaging and the failure to warn of hazards known to the producer. The law of tort throughout the U.S.A. Is today on the verge of going even further. It Is approaching the then of imposing strict manu facturer's liability (i.e. without regard to negligence) for the bene fit of all parties who could reasonably be contemplated by the manu facturer am users of the product. There Is even some advocation of extending this approach to cover unforeseen victims, i.e. persons not contemplated by the manufacturer. I am enclosing a photocopy of Sec. 402 A of the current American Law Institute's Restatement of Torts. While this particular paragraph may not be applicable to asbestos fiber for various reasons, which will be apparent to you when you read It and the comments thereto, It la an Indication of the present legal thinking of the legal Intelligentsia. In this connection, I should like to point out to you that the "Restatement" title Is something of a misnomer as It le largely an original statement. Tue "Restatement" is preparsd by a committee of leading legal scholars. Judges and practitioners and expostulates what they think the law should be. It le In no way binding upon the courts of the various states In the sense of etaie decisis. However, most of the time Its recommendations >i' grndually adopted Jurisdiction by Jurisdiction. The continuance trend of Imposing strict liability In tort upon the manufacturer of an ever .........r >iorsor>s Is thim more -3- than a Bare speculative possibility. A comparable trend la evident in a law f c-rtract. Just as the re- uuireeent ot vertical privity vas eliminated in tort in MacPherson vs. Bulck. supra, the requirement of privity of contract has been elimi nated in the very recent case of Kaasab vs. Central Soya. (Sup. Ct. of Penna., Oct. 11, 1968), at least insofar as the State of Pennsylvania is concerned. The Supreme Court of Pennsylvania, of course, speaks only for Pennsylvania, but Pennsylvania, like New York, Is a leading state in the development of commercial law and the courts cf less Industrialized states generally follow the lead of their more advanced sister states. Through the approach of coupling the imposition of an Implied warranty of merchantability (non-defectlveness) upon the sale of a product with the destruction of the requirement of vertical privity, the courts can approach the strict liability of the manu facturer Imposed in tort because the warranty of merchantability can be breached without regard to negligence on the part of the manu facturer. The possibility of horizontal expansion of this doctrine is evidenced by Sec. 2-318 of the Uniform Commercial Code which pro vides as follows- "2-318. Third Party Beneficiaries of Warranties Express or Implied. A seller's warranty whether express or implied extends co any natural person sno is in me isbiIv or household of his buyer or r.c is a guest m .-.is home if it is reasonable to expect that such person may use, consume or be affected by the goods and who is injured in person by breach of the warranty. A seller nay not exclude or limit the operation of this section." Obviously, this section does not encompass all persons injured because of defects in the product; but it, too, evidences a trend towards the elimination of the privity requirement on the horizontal level. Perhaps I should explain that the Uniform Commercial Code is statutory in nature and governs, among other things, the law of sales. It has been enacted (with only minor variations) by individual state legisla tures on a state-by-statc basis throughout the United States in every state but Louisiana (having, incidentally, been initially enacted by the State of Pennsylvania). Thus, while the Code is not a federal statute, its general atate-by-state enactment gives it almost the same effect. I am enclosing a photocopy of the opinion of the Court in Kaasab vs. Central Soya, supra. In summation, we feel that substantial risk exists that a "manufacturer'' of asbestos fiber will be held liable to parties who are injured as a - .-ill of the inhalation of those fibers, whether those parties are . . '..iHnrs of the fiber, employees of such purchasers or entire thnt "r ................. < *'!*<*